LATEST ENTRY

LINKS | Noah Brier

Do Economists Make Better Decisions?

August 27, 2009 | RSS | EMAIL | PRINT | 3 COMMENTS

I love this advice by economist Justin Wolfers on the Freakonomics blog about why it helps to be an economist when you're making decisions:

By sticking to economics, I make time for running. Rather than spend hundreds of dollars worth of time cleaning my house each Sunday, I hire a cleaner who does a better job at a better price. When a friend asks me to help them move, I write them a check to pay professional movers instead. It's just more efficient. And while it can be hard to forgo extra income for a long run, it is even harder to justify wasting that time on Facebook. And with the time that saves, I'm pulling on my shoes to head out for another run.

This is something I've been thinking about quite a bit lately, especially in relation to health: How does awareness of economics change your behavior? Personally I've been pretty focused on how people tend to be irrational about their health decisions and so every time I need to make my own health decision I question whether I'm making that same mistake. Obviously I have no long term data, but I seem to be flossing more as a result.

Tags: economics, psychology


PREVIOUS ENTRY | NEXT ENTRY

LEAVE A COMMENT

First name, first and last, whatever you feel like.

Required, but not displayed (so don't worry about spam).

If you've got one, flaunt it.

You can use some HTML (a's, br's, p's, oh my!) if you'd like, if you don't know what that means, don't worry about it.
REMEMBER ME?

COMMENTS

1Jared Gruner

He probably frees up a ton of time to write apology notes to his friends.

If I ask one of my buddies to help me move, I'm not just looking for an extra set of hands. Men helping men move is male bonding 101.

That's what made it so vexing when Keith Hernandez asked for Jerry's help after hardly knowing him.

I think on the whole it's good to understand costs and benefits. But approaching every decision like an economist sounds pretty dull.

Oh, and I just finished two slices from Ray's.

August 27, 2009

2Noah Brier

Ha, yes, your life would not be very fun if you only made decisions this way (or maybe it would ... who knows.) My point was more that it's interesting to think about how that mindset affects decisions, there's no reason an economist can't decide to act against their own rational self interest.

August 27, 2009

3Jared Gruner

Sure, fair enough. Of course the economist is anal-retentive enough to collect the necessary information before making a decision. Most of aren't though.

I think people selectively ignore/forget healthful knowledge in particular because it's fun/easy to be unhealthy, at least in the short-term. And because unquantified knowledge is an abstraction. That leads to justifications like "Eh, it's just one cigarette. How bad could it be?"

But when you shove actual facts in people's faces -- as New York has done with calorie counts at chains -- it becomes more difficult to ignore. That bagel has 300 calories? This burger has 900 calories?

As far as I see it, bringing hard facts to people at the point-of-decision is the only way to get regular people to start weighing their decisions like economists.

August 27, 2009